Here is an interesting question: How does the present employment rate compare with the prior peak?

According to Bureau of Labor Statistics data, if we compare the prior recent peak of 139,143,000 of November 2007 with last month’s figure of 137,942,000 (I used non-seasonally-adjusted because it’s November to November), we are still 1.2 million or so below the earlier highs. This suggest that by May or June 2014, the recovery will pass previous top levels. (Perhaps it’s noteworthy that women have already passed their prior peak employment).

But let’s look at this differently. What if we back out all of the artificially driven employment that has disappeared? If that is the case, we have probably already passed the prior “reality adjustment peak employment” — months ago. That is, remove the real estate agents, mortgage brokers, subprime securitizers, construction workers, etc., of the bubble and you end up with much more modest numbers.

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

That sole statistic is too crude, ignores per capita wages vs debt, cost to service debt & percent of population working full time. (consumer buying power, multiplier, velocity)

While the rate of retiring baby-boomers matches population growth, globalization and technology are actively diminishing labor demand & wages.

As this happens, entitlement dependency & spending increases, meanwhile the economically illiterate promote corporate and cap gains tax cuts, as if lower taxes can offset wages for third world workers who make $2 a day, never mind the fact that more than 70% of our entitlement recipients already receive food stamps or medicaid.

Yes, it appears 2014 will be the last year in the recession outside some shock. Probably the biggest yry drop in unemployment will be between January 2014 and January 2015. The funny thing is, the unemployment drops between January 2015 and 2016 will be far smaller, but the “indicators” like LFPR and EPR will be moving higher by then………

That is how it always works. The nature of expansion/recession/recovery changed in the 90′s due to computerization. People still have not gotten this, especially econ-bloggers.

Also I am not sure I agree with your reality adjustment. We need construction workers and real estate people a lot more than we need social servants, welfare queens, and more health care administrators. I would also hope that there would be work for hard working bankers if there is such a thing.

That decline is due in large part to demographic trends in place since Post WW2.

Look, I am not saying that this is a fantastic labor market — its far from it — but what we are showing here is a different way to look at the 2004-2013 Era. We are back to pre0bubble (or really ex bubble) employment levles.

To repeat: once you factor in the declining labor participation rate, 16 yrs. old and higher (2001=67%, 2012=63% per US Bureau of Labor), the increase in the labor pool due to the increase in population ex retirees leaving, we’re quite a ways off today vs. past. Not to mention the toxic effect on the economy of stagnant (thus declining) wages for the non-rich.
Finally the unemployment rates among the young, especially minorities hasn’t budged for years now. Not a pretty picture, but hey! that means QE stays, markets up, yachts, Dom Pérignon, caviar and truffles (real ones) for the pretty people.

I was referring to the net (ex retirees) population increase effect. Also, the impact of the retirees on the size of the labor force is seen throughout the time frame shown (2001-2012) though more pronounced in the later years. And yes, ironically, “the boomers are the only group with rising participation rates!”. Then you have those on disability who according to the Economist (http://www.economist.com/news/finance-and-economics/21586810-rising-disability-claims-may-explain-americas-shrinking-labour-force-missing) could explain between 31% and 59% of the decline in participation among 16-to-64-year-olds. Seems like when all is said and done, the rough, round figure of 100,000 thousand new jobs needed monthly just to counter the new entrants in the labor force (net of retirees) stands. The recent employment numbers show an upward trend well above the 100,000 figure; let’s keep our fingers crossed and pray that we wont see a FinCrisis 2.0 or an Iraq redux.

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About Barry Ritholtz

Ritholtz has been observing capital markets with a critical eye for 20 years. With a background in math & sciences and a law school degree, he is not your typical Wall St. persona. He left Law for Finance, working as a trader, researcher and strategist before graduating to asset managementRead More...

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